Chinese smartphone maker ZTE says it's aiming to ship 100 million smartphones a year by 2015 as it aims at more up-market devices to reverse the decline in its handset margin.

The telecommunications firm sold 15 million smartphones in 2011 and has set its sights on the 50 million mark for 2012.

But it says it plans to focus on upgrading its Blade and Skate smartphones rather than unveiling new models while it expects to see tablet PC sales double in 2012.

"As handsets contribute more to overall revenue, it will affect our profit margins. In 2012, our aim is to increase handset margins," ZTE executive director He Shiyo told reporters at the company's annual analyst conference in Shenzhen.

It's just a phab

ZTE is also looking to take on Apple's iPhone and Samsung's Galaxy with two phone-cum-tablet devices which will see the firm branching out from low-end smartphones – the company's biggest commodity.

"We want to come up with the next generation of a Galaxy Note-type product - a combo product of handsets and tablets," said ZTE's head of handset strategy Lv Qianhao.

Analysts have said that the Chinese company should focus on building a brand out of ZTE if it wishes to take on its global rivals.

People who buy Apple and Samsung have greater brand awareness so they might not take chances with a little-known brand, especially one from China," said Teck-Zhung Wong, a Beijing-based analyst for research firm IDC.

"No one really knows ZTE outside China."

Big trouble in little China

ZTE, which has a market cap of around $9.3 billion, was named as one of the key players which analysts expect will see China overtake the US as the biggest smartphone market in 2012.

However, gross profit margins for ZTE's consumer gadgets division, comprised mostly of handset sales, was down 3.8 percent to 15.2 percent in 2011.

Nomura Securities analyst Huang Leping looked into how the firm could improve profit margins saying: "They will have to raise their average selling prices and to do so will largely depend on their sales in the North American and Japanese markets."

[source: Reuters]